F. Scott Fitzgerald (On Money & Mess)

F. Scott Fitzgerald was born September 24th, 1896 on Cathedral Hill in St. Paul, Minnesota. I wrote a post last year celebrating his birthday. When I reread it last week, I made a note to drop a comment there, a Happy Birthday wish. Then I watched Bill Moyers Journal last weekend, and the short comment took a longer turn.

Moyers began the Journal by quoting a few lines from F. Scott Fitzgerald’s The Great Gatsby, about his protagonists, the Buchanans:

They were careless people, Tom and Daisy — they smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made.

It’s happening all over again, except this time Tom and Daisy are the titans and speculators on Wall Street who took the money and ran. Their bubble burst, as it did in the roaring twenties, leaving the mess for you and me, our children and our grandchildren, to clean up. The big bad government — so despised in Wall Street boardrooms and beltway think tanks — has stepped in, hoping to save capitalism from the capitalists…

Here we are — cleaning up the mess. I was reminded of our recent Writing Topic, Where Do You Go In Times Of Crisis?. We are a two-tiered culture, steeped in debt: a wealthy culture that privatizes gains and socializes losses; a poorer culture of working class, middle, and lower income people, forced to take more and more personal financial risks to stay afloat.

Bill Moyers Journal digs into some of the deeper social issues behind the current financial crisis. And how everyday people — people like us — are going to pay a heavy price. I’m not good with numbers. I don’t understand the details of financial wizardry. But his words made sense to me, and inspired critical thinking about the future of finance in this country.

Who wins and who loses? New York Times financial columnists, Gretchen Morgenson and Floyd Norris shed some light on that question. And Moyers interviewed former Nixon White House strategist, and political and economic critic, Kevin Phillips on the “7 sharks in the tank with the economy.” Phillips, author of Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, said financialization has made us dependant on an industry that’s lost half its marbles, and strapped us with debt unprecedented anywhere else in the world.

The experts also talked about how the state of our money union does not play politics. Reaganomics may have started the economic downslide. But Democratic and Republican administrations have both contributed to the problem. According to Phillips, “the flush of the Democrats (the labor movement) carries a lunchbox; the new soul of the Democratic Party wears a pinstripe suit.” And neither of the current candidates is addressing the reality of the situation. Campaign promises are not going to bail us out this time.

The show has the perfect climax — a personal essay on the decision to tear down Yankee Stadium. How the new stadium will be subsidized by the public with tax-free bonds. How the greed and disregard for local community trickles down to neighborhoods, cities, and towns across this country:

And so this Sunday evening we will bid farewell to dear old Yankee Stadium, and await the new colossus to rise from its ruins. It will cast its majestic shadow across one of the country’s poorest neighborhoods, whose residents will watch from the outside as suburban drivers avail themselves of 9,000 new or refurbished parking spaces. Never mind all the exhaust, even though in this part of town respiratory disease is already so high they call it “asthma alley.”

I thought of the new Twins stadium in Minnesota, the same stadium that we the people voted over and over again not to build. Its skeleton now rises like a Phoenix from a giant parking lot behind the Target Center, and towers over a small downtown shelter that feeds and houses the homeless.

I can’t help but wonder — is anyone going to step up and take responsibility for all this debt? How have American lifestyles and personal debt contributed to the problem? Where are our priorities? When will we get back to supporting what is important and vital to a culture – community centers, education for children, the Arts, having enough food on the table, and enough money to live through old age.

Have you been able to save for the future? How is your retirement growing? It might not surprise you to know — not all of us are struggling. (Are we really entertaining a bailout?) I was stunned by this list from Moyers:

Lehman Brothers – in the last 5 years of his tenure, CEO of Lehman Brothers, Richard S. Fuld, Jr. earned $354 million

Merrill Lynch – the current chair who has been on job for 9 months, John A. Thain, pocketed a $15 million dollar signing bonus. His predecessor, the retired E. Stanley O’Neal, pocketed $161 million after the company reported an 8 billion loss in single quarter.

Bear Stearns – former CEO James Cayne sold his stake for more than $60 million after the Bear Stearns stock collapse

Fannie Mae and Freddie Mac – former heads, Daniel H. Mudd & Richard F. Syron, received 24 million combined in severance packages on top of their salaries

Retreating back into their money. I think there are more than 7 sharks in the tank with the economy, and someone has surely lost their marbles. The question is — who’s counting?

KEVIN PHILLIPS– discussion with author of Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, and former Nixon White House strategist and political and economic critic (great sense of humor)

WINNERS AND LOSERS – segment with New York Times business and financial columnists Gretchen Morgenson and Floyd Norris as they discuss who wins and who loses in the financial turmoil

58 Responses

I’m at home writing today, checking the news reports every 30 minutes. What is happening? A bailout? What are Bush/Obama/McCain discussing in the Oval Office right now? How about Congress? What are they ironing out?

It occurred to me this morning to pray for these meetings. I usually don’t think about praying for people in government, they all seem too crooked to deserve a prayer. But it’s what I have left. After all, I’m just one person living hundreds and hundreds of miles from Wall Street and Washington. So today I personally won’t incur any debt, and I’ll pray for all these in the middle of the boiling pot.

Sinclair, thanks. I like the way you think. It’s occurred to me to do the same. I’m worried about people like my mother and Liz’s mother who are nearing or at retirement age. I’m worried about the children growing up to inherit all this debt.

But I do have faith that things will turn. It’s all exploding now, the greedy facade is cracking around us. I guess it will say a lot about us as a country in terms of what we do about it.

But I agree with you — I am praying as well. And for today, I will not incur any debt. Situations like these force us to look at our own personal finances and how we may have contributed. Things seem so out of balance. Yet it’s not as simple as pointing fingers. We’ve all got to figure out how to do our part.

I’m encouraged by all the people calling Congressmen and Congresswomen and Senators, NOT in favor of the straight-up bailout. People are starting to wake up.

I went to a workshop last weekend related to money. I was having a discussion with one of the speakers. I said I thought this thing would go one of two ways at the individual level – people will either wake up and stop debting themselves. Or they will look at the government and go, “Hey, they incurred all this unsecured debt and they are getting bailed out. Why not me?”

If you look at those at the top, they have been our debting role models. Unless people seek alternatives, they are going to keep debting and living beyond their means (my humble opinion).

I see there has been some sort of agreement reached in Congress, I haven’t read the details, but it looks like it has been a joint decision. I’ll keep praying; our leaders are up to their neck in it.

This sort of national debt is staggering, I don’t even begin to understand it or its solutions. But I agree with you, QM, a wake-up call is desperately needed. Though I obviously would never welcome back the Depression of the 1930s, what it produced was a generation of people who only bought things they had the money for. That idea has been completely lost, by our leaders as well as our citizens.

It’s really causing people to go back and study the Depression. There was some talk on the Moyers show about the last Depression and discussion about why Roosevelt’s New Deal policies would not work this time around. It was really interesting to listen to.

Are we destined to repeat our mistakes? I watched a PBS show this week on Reagan’s policies, how he had one chance to balance the budget and he chose to head the other direction. When he had to choose between balancing the budget and funding defense, he always chose defense. It was fascinating to see how his choices helped to start this kind of scale of national debt. Everything is connected.

Were people this aware of how deep we were in a mess/heading for a mess back in Reagan’s day? It seems not. That gives me some hope, that the loud clanging bell has gotten people’s attention.

I went to hear an Alaskan author/photographer last night at the Minneapolis Public Library, Seth Kantner. During the Q & A, there was one question about his writing, and the other six or seven questions were about politics and global warming. The audience was furious about what is taking place. They came to hear a writer, but all they could think about climate change.

I just hope we don’t get lulled back to sleep. How can we prevent that?

Teri, I can see how that happened with the Alaskan writer. That’s how I feel when I hear the so called experts talk about drilling in our last remaining wildernesses. It’s so shortsighted.

I heard another program on alternative energies and how the subsidies have dried up in this country. After years of subsidizing those working for alternatives, we are now to a point where alternative energies are becoming more viable – and thanks to oil conglomerates and the current administration, all the funding has dried up.

Consequently what’s happened is that other countries have come in and bought our start-up companies who are dealing with alternative energies because they are smart enough to know they are the future. One company was in Ohio, and all those jobs then went overseas. At the same time, the Ohio either Senator or House, can’t remember now, voted against subsidies for alternative energy, even though his own state would be losing jobs. It’s insane. And all connected to what’s happening with this bailout.

I think a good thing that is happening is that people are seeing how connected everything is. We can’t just say us and them. We are all contributing in our own way to the problem. And part of that is by staying ignorant to what’s happening around us.

The other part, in my opinion, is that we have become people who want results RIGHT NOW. We aren’t willing to do the work of waiting for things like alternative energies to come to fruition. To grow and mature. It’s all about the most money that can be had, right now. We’ve got to be willing to wait for what’s good and whole. I don’t know how that happens. Maybe part of it is slowing down long enough to think things out.

It’s scary how fast things are happening with this bailout. Has there really been time to think things through? And why aren’t we taking the time? If we’ve waited this long to take action, another week is not going to matter.

QM, on break over here in Seattle, and unfortunately I don’t have time to dig into this meaty post. I was immediately struck by the lead photo, however, and wanted to ask you about it. It looks like a shot taken through a skylight or window looking up at the sign. But it also looks like the sign projected on a screen in a small box. It’s intriguing—please shed light on that shot.

So I wonder, will the Ohio senator be voted back in? Or, will his state insist on leadership that supports their state?

On Sunday I happened upon a town hall meeting at the Minnesota Historical Society. I had gone to see the Ellis Island photographs, and was swept into a forum about the differences in foreign policy strategies of the two presidential contenders. The four people on the forum included: two Congresswomen, one army general, and one ambassador. I learned more about Afghanistan in 90 minutes than I have in the last seven years.

Anyway, it was very heartening to hear this people. They are smart (really smart!) people in leadership who clearly are not going to roll over and play dead with difficult decisions ahead. They need our support. I’m not sure how to do that today, but I’m on board with doing my part.

It is so infuriating. Many Americans could live on a fraction of those dollars folks raked in on severance pay; and it’s even more a slap in the face after the same company (headed by the SAME CEO that just bagged millions of person gain) — shared off losses to the public.

Now we get to see blowhard on the news last night with his “salvation” plan. I just want to tell him to “get a job” — preferably front line in IRAQ — like some of our brothers and fathers have had to do. Really makes me angry. Applause for your post!

It was one of those nights when I was kind of “in the zone.” I was really happy with the way these shots came out.

The shot you are asking about, yes, it was taken through a skylight right as you go into the entrance of the Fitz (good observation). There are a couple of layers to it. The light is reflecting back at me from the plastic skylight causing those streaks. Then the light streaming in is causing the dark border around the skylight. And the light from the tungsten sign (and dusk) is bouncing off the wires. I love those little streaks. I had a couple of these shots. It was hard to choose.

The projection layer you talk about — this particular Fitzgerald sign is lit from the inside and kind of projects the photograph of F. Scott out. At the same time, you’ve got his name lit up above it in kind of a retro style. I just love this building and the care given to every detail. I really appreciate the preservation of architecture and history like this.

That evening in October, it was blue when we went in, raining when we came out of the Fitzgerald. If I remember correctly, Teri and Liz were standing there talking, waiting for me to finish shooting. One thing about going to events or on vacation with photographers or videographers — you are always waiting for them to finish getting their shots.

I try to be respectful of that. But there are times when friends and relatives have to be patient because this particular moment with these particular shooting conditions is never going to pass this way again!

I know Mom spent some time waiting on Liz and I when we were in Georgia last July. And that can be hard. We do try to be respectful though! And sometimes, I just don’t take my camera along. But in the case of seeing writers speak — I always bring it. Thanks for asking. 8)

Your town hall experience sounds similar to something I watched for a bit last weekend with Madeleine Albright and CNN chief international correspondent and moderator, Christiane Amanpour. It’s so enlightening to hear people other than ourselves, our friends, our immediate circle, talk about these issues. Because they bring in so many other points of view. It’s good to really listen, then create our own points of view and try to look at the issues, not the people.

What did you learn from that experience?

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Oh, I never answered your question (#5) about Reagan and if people knew back then what they know now. It seems like (at least from the program I watched) he made some of his decisions based on what would give people immediate and temporary relief. (And others on what would keep him popular.) And in the beginning, people were behind his budget decisions. But then things turned when people realized his economic solutions were only a band-aid and not long-term. In the end, people were figuring it out. But like now, it was almost too late.

It seemed like people did know a while before he left office. I think back then, we had more access to truthful information from journalists. These days it’s harder to know what’s true, what’s really happening. It seems like frontline journalists today are under more pressure to produce that “big story,” whatever it is. What’s happened to investigative journalism where someone follows a story for a long time? How do we know what’s true?

I tend to trust someone like Moyers a little more. That’s just me. I think he’s been around a while and earned his credibility. He also seems to have integrity. And more freedom to do the stories he wants to do.

I agree — I want to support “smart” people who have integrity and look at all sides of an issue, not just the side they agree with. How to do that more? I don’t know. Maybe just the way we are doing it now.

Sibyllae, that list is really sobering. Some people are making astounding amounts of money as we continue to go through all this.

Interesting turn about the debates tonight as related to these economic decisions that need to be made. I wonder now if they’ll even happen tonight. Or is that only an idle threat. More unfolds each day.

I was listening to coverage on MPR this morning, how the Washington meetings have people screaming and shouting at each other. When it comes to money, people can get crazy. Will be interesting to see what happens.

QM, I just read through your essay. Yes, who is counting? A lot of eyes are now watching, but do you realize, $700 Billion relates to no real spreadsheet? There is no calculation that says we need exactly xyz dollars to help these failing institutions—which are all private, btw—turn around by x date. No, $700B was a really huge number, and all the Administration knows is, they need a really huge amount of money for the bailout.

We are confused individually, and the more I watch members of Congress and the President speak on TV, the less confidence I have that they aren’t confused, too.

I mean, I understand what’s happened. Deregulation of the financial industry over the years, the creation of so-called innovative lending “products”—this type of loan and that type of loan and loans that require nothing down, etc.—then the financial institutions (because they’re not required to any longer) not keeping a high enough proportion of liquidity relative to the loans they’ve made, then consumers taking out more than they could (because they’re not required to show their own ability to pay off the loan), then individual loans and business loans starting to fail, and then boom, the dominos are tumbling.

But where does the $700B go? How does it work? And why that amount? And what is the long-term effect on our federal budget? We are in such a huge deficit right now, which doesn’t include the billions and billions funding the war, and so how can the national budget ever get back into balance? Especially in light of the promise to not raise taxes? Not going to happen. Just be honest with us. That’s what I want. Just acknowledgement that someone understands what this all means, because even if I don’t get the details, man o man, I see the big picture.

Thanks, QM, for addressing this. It’s tough, and it would be tough in any situation, but because it’s politicized it’s even tougher than normal. One last thing. I’m not a conspiracy theorist, but even I had to wonder if this wasn’t a big crisis manufactured right before elections to try to throw the vote in one direction. Remember 2004 and how two years earlier we went into war? And then no one wanted to change horses. That shows how much trust I have in our leadership. And I bet I’m one of millions. Sad.

Just be honest with us. That’s what I want. Just acknowledgement that someone understands what this all means, because even if I don’t get the details, man o man, I see the big picture.

That’s what I am looking for, too. Honesty. And I would add a second thing – accountability. Someone that steps up and takes responsibility for some of the decisions that have been made. I haven’t heard that from anyone.

It seems very complicated. And I can’t pretend to understand. But I’m with you — I think everyone in government in both parties are pretty confused and trying to sort everything out. How in the world did it go this far before Senators and Congressmen took their heads out of the sand?

I’m not really a believer in the conspiracy theory on this one. I think it’s really happening. But I can see how that could be circulating in today’s political climate. It seems like it’s been leaning in this direction for a while now. And at the individual level, everyday people are hurting. But, hey, you never know.

Curiously, I received an email from a woman who works in a financial institution about someone’s alternative suggestion with the 700 billion dollars – that according to some accounts is more like 850 billion. They broke it down using the same statistical numbers the different parties are banking on in their efforts at selling the American taxpayer on footing the bill (all the while, the private corporations at fault would be exempt – how convenient!).

The alternative suggestion was:

Of 301 million people in the U.S, approximately 200 million are adults over 18. Break down the 85 billion and that would entitle all adults about $425,000 dollars each – direct to the taxpayers!

Even if there was a 30% tax imposed, that still nets about $298K for each person. What could we do with that money? Pay mortgages, educate our children, invest in sustainable energy. GET A REAL government instead of one so obviously corrupt and past salvaging.

Wow – what a concept- give the people their freaking money back. I wish. I really hope some Congress person or whomever is in these discussions actually puts this out there. In my opinion, it sure beats bailing out AIG. Hmph.

I watched W. the other night. What did I get from his address? I walked away with the thought “If you can’t dazzle them with brilliance, baffle them with bulls–t.” I mean $700B? Gee W., what are you thinking? Why this amount & where will it go? Well, I’m not the sharpest knife in the drawer, but I know I’ll be helping to pay for it. And the reckless shmucks that allowed it to happen walk away with the big bucks. I look forward to the day that W. walks out the door for the last time.
ybonesy wonders if this is a political crisis manufactured to throw the vote? I tend to believe it is. That’s how much trust I have too. Sad to say.
I see the debate tonight is on. I can’t wait. I’m anxious to hear what Obama & McCain have to say about this mess. Anxious & looking forward to casting my vote for Obama come election day! D

Sibyllae, those are some amazing numbers. I like where they’re going with that solution. But I wonder about what would happen at the individual level if they did that. That’s where individual accountability comes in.

What if they did hand out $298K for each person? My only question would be if people would use that money to pay mortgages and old debt, put it towards education or sustainable energy? Or would they keep living beyond their means and go for the instant gratification that much money lends itself to? That’s where I wonder how each individual has contributed by buying into the theory that we have to go into personal debt to live, to even make ends meet.

It reminds me of the last tax stimulus package kind of, when we got those rebate checks in the mail. I wonder how people spent them. Did they put them in savings, pay off debt, buy food, pay the mortgage? Or did they go out and buy something new they’d been wanting for some time. It’s so interesting to think about.

diddy, I hadn’t heard yet that the debate was on. As of this morning, McCain was still not going. I’m glad it’s going to happen. I’ll be watching it with you. I heard the debate is on foreign policy but I wonder if they will throw in some of these economic issues. I’m really needing to hear someone step up and say something real about the financial downturn, have us take some accountability as a country, something besides political rhetoric. I’m hungry for something real.

The debate IS ON! CNN pre-debate starts 7PM EST (a few hours different for Pacific time)— and the formal debate begins at 9:00 pm.

I haven’t found yet for other networks yet but surely everyone will have it.

As for concerns about people spending- I see that point but I really feel the majority of people have probably never had the opportunity to have that much to really deal with a major issue. Sure some may use it unwisely- but I would still rather see the individual receive it because I bank on that more than the folks behind this ridiculous scheme. Seems that also want the same administrations that caused the problem to begin with the authority to “delegate and distribute” the billion dollar funds. Can they be any stupider? No, I think they are just relying on the mass stupor in America since we voted them all in – taking taxpayer money has proven to be a profitable industry built on our ignorance.

Not to carry on or change the subject – but just sharing something recently published in the New York times — follow up on Sarah Palin’s “rape kits” – that VICTIMS are to be billed for….

Syballae, thanks for the link. Will check it out. And yes, that makes sense. Trusting the individual more than government is something I subscribe to as well these days. But I do like to look at issues at all levels. “How can I make a difference?”

I watched every minute of the debates. I felt neither candidate would really address the economy or the dire issues around money that were going on in Washington as they each spoke. I did hear a few “spending freeze” lines from McCain, something I don’t support. Nothing from Obama. Disappointing that neither decided to take it on head on.

I thought both candidates did well in the debates. There are places where they meet, and so, so, many places they diverge. I am solidly in the Democratic corner. I can’t support many of the Republican platforms. But I like listening to both sides.

I don’t like politics all that much. What I did enjoy was watching the 20/20 show before the debate, where both men’s lives and history were explored. I felt like I learned more from that than the actual debate. Though, in fairness, I am glad I watched the debate. There were a few things I did learn. And it’s good to follow the Democratic process in action.

They have each been through a lot in their lives. I think they each genuinely care about people. But such different policies as a result of what they have been through. For some reason, I can’t get angry about these things anymore, not the way I used to. Though I have strong opinions, I tend to stay more even. I’m going to cast my vote on election day. And hope it makes a difference.

I listened to the debates on NPR. Though I missed seeing the facial expressions and body language of the candidates, it did help me focus entirely on what they were saying. Obama said, “That’s not true,” a lot. McCain said, “Senator Obama doesn’t understand,” frequently.

I, too, am solidly in the Democratic corner, but tried very hard to listen to McCain. He may win, after all. I don’t want to have to hate him. It’s taken a lot of my precious energy to loathe our current president, and frankly, it’s made me tired.

I watched the last half of the debate last night and thought it was a draw, but found I liked both candidates less when it was over.

My son was just released from the Army yesterday, having completed his enlistment contract. He served a tour in Iraq. The Army maintains the right to call him back to active duty for three years. I have another son who just reenlisted in the Marines and is training for a counterintelligence job. During the debate even Obama talked of sending two to three more troops to Afghanistan. McCain later drove home one of his points by saying, “Until then, we in America are not safe.” I found myself furious with both candidates for being so willing to put my sons in harms way … willingly sacrificing the LIVES of others to help us feel a little safer here at home. I was discouraged by the debate.

Regarding the financial crisis, it has not been mentioned here yet that it was an act of Congress during the Carter administration that started us down this slippery slope. It is not a surprise at this time that it will take a subsequent act of Congress to resolve the issue.

The Community Reinvestment Act of 1977 required lending institutions to make loans in poor communities, to people who were not credit worthy by regular standards. This created the sub-prime loan market.

In the 1990s, this legislation was expanded, which wasn’t an issue at the time, because housing prices were going up, so not many people worried about the risk. These loans were packaged into investment products with the loan as collateral and the property as ultimate collateral.

When property values declined, investors in these types of securities became nervous and stopped buying them. The owners of these declining investment products had to write them off their books, creating a secondary crisis in investment and commercial banking.

Some people believe that we got into this mess because our government tries to be able to be all things to all people. Congress believed that people who could not afford it should be able to have a house. That seems noble, but unfortunately, it is not sustainable during tough economic times. Congress required institutions to make these loans. It is not unreasonable to expect Congress to step in at this point to offer a solution to the current economic crisis, which they’ve helped to create.

The wave of spending by solidly middle class families over the past decade, in particular, where we’ve seen a mushrooming of large homes, two or three gas-guzzling cars, a recreational vehicle or two, etc.—this has to have contributed greatly to the financial crisis. This is not the poor overextending themselves. This is about the explosion of subdivisions that we see in every city we go to. It’s about a story a coworker told me of her neighbors who took out an $80K loan to build a patio and landscape the backyard, and now they’re going belly up, will complete the landscaping since they have the money, and then declare bankruptcy.

This is a mess that different entities have contributed to–government, private sector, individuals–each in its own way.

It’s taken a lot of my precious energy to loathe our current president, and frankly, it’s made me tired.

Teri, I’d been struggling with how to find compassion for him, and now I’m at the point where I’m going to stop trying. I’m not enlightened enough to love everyone regardless of what they do, so I’m letting the emotions come, then letting them go. I’ll let you know if it lightens my heart.

Teri, I wonder how it would have changed my views if I had listened to rather than watched the debates. Sounds like the art you viewed on the most used words by Presidents influenced the way you listened to the debate. You comment about the loathing or hate — so true. It does take a lot of precious energy to hate.

breathepeace, you really nailed some of the Democratic contributions to the current situation. It’s both sides that have made this mess. And I agree with ybonesy, too, I don’t think the middle class, or any of us for that matter, can escape that we’ve all contributed in some way. Either by a vote we’ve cast, or the way we’ve lived our personal lives. I guess the question now is — how do we repair the damage.

I really appreciate all the thoughtful comments on this post. I thought about them over the weekend whenever I’d hear news about the bailout. I think all of our points of view are valid. When I listen to the news or people’s political opinions, I’m still always amazed at how each person believes they have the answers, that they are doing the right things. It will be fascinating to see what happens as we move forward.

breathepeace, I wanted to respond to one other thing about your comment and forgot. Am adding it here. You have a unique perspective on much of what is happening with the war by virtue of your sons’ enlistments. It adds a lot of credence to what you are saying.

BTW, the piece Obama said about sending a few troops back into Afghanistan — that was one of the things I learned about by watching the debates. I didn’t know that before and was really surprised by it.

I am so happy one of your sons is home. But it’s got to be so hard for him and your family to know he could be called back anytime during the next 3 years. And then your other son reenlisted to go back to war. That’s got to be a whole other story. I can’t imagine how hard that is.

Whenever you share about that part of your life, it always gives me pause. And makes me think of all of the sacrifices families are making in regard to these issues.

My phone rang off the hook last evening—friends who wanted to talk through their options on savings and retirement funds. Some pretty huge losses yesterday for these individuals—for all of us in the U.S. with 401k plans. I am sure we had huge losses as well, although I’m not rushing to check out how much exactly.

For me, these retirement funds are not real and liquid *yet*, because I have at least ten more years of work. So I don’t take the losses as real and permanent now. (I know this is not the case for people who are retired or on the verge of retirement, but in the case of my friends, they are about my same age.)

After the last huge drop (the one that happened when technology bubble burst and then post-9/11) I saw all my mutual funds grow back; I try to stay as calm as possible. (Of course, this financial crisis is way worse, and it is hard to keep the anxiety from seeping in.)

ybonesy, I’ll have to check out that link. It seems like yesterday was when it really hit home for a lot of people. Things are trickling down to the individual level. It’s almost scary how everything is so connected in the financial world. Everything I’ve heard from the experts has been to make sure we’re divested and wait things out. I have to wonder, too, how it’s going to affect people who have no savings or retirement funds.

I was listening to NPR’s coverage of the candidates’ healthcare plans this morning. Healthcare is something that’s really important to me — to see that people have it and can afford it. I’ve seen lack of good insurance wipe more than one person out. And it’s more common than you think. Healthcare is the thing a lot of people cut out of their budget when times get tight.

Neither candidates are making adjustments to their plans for what’s currently going on in the financial market. I’m wondering if healthcare is something that will even get addressed at all the first few years of the new President’s tenure.

I think it’s going to be tough to address healthcare in the first couple of years. Just getting the budget back into balance…can you imagine?

How will the meltdown affect people who no savings or retirement funds? Well, the way it can play out is huge job loss as small and big businesses no longer are able to fund growth and in many cases keep their companies afloat. Also, I know in the industry I work, if individuals and companies can’t buy the products we produce, then we have to cut back; again, we’ll likely see layoffs. The multiplier effects are deep and far-reaching, and as you say, every is connected in this economy.

But I have hope. FDR came into huge crisis and mess when he became president, yet his accomplishments and leadership are viewed as some of the most successful in the history of the U.S.

I’m really confused by the bailout issue this morning. Someone I really respect, Minnesota Senator Amy Klobuchar, talked in the same breath about turning to support the bailout proposition (something she originally didn’t support) — and tacking on one of Wellstone’s former causes, a mental health parity law to the bailout. Though I support the parity law, do I really want it attached to this bailout?

Since then, I’ve heard that more and more things have been tacked on to the bailout to help it pass. I mean what gives? Is the initiative being passed by making sure personal political agenda’s are funded and satisfied. I don’t know what to think. Maybe I’m just naive, but is anyone else confused by this?

Those are the add-ons to “win the support of reluctant lawmakers.” Some of the add-ons make good sense—increase in bank deposit insurance (so that if a business, say, has large amounts of cash flow in the bank, if the bank goes under, the FDIC will insure up to $250K of that money in the bank). But there is also $150.5 billion of unrelated personal and corporate tax cuts.

I imagine the mental health parity law was key for getting yet a few more reluctant senators to sign on.

ybonesy, well, all this is a done deal; the bailout passed. I’m disheartened and discouraged that no one has addressed the real issues behind all this debt — we are a country of debtors. Or held anyone at the top accountable. I am also aware that Democrats joined Republicans in adding a whole lot of pork where it had no business (kind of smells a little like bribery) to a bailout that needed to be judged on its own merits.

These issues are very complicated. I watched a follow-up Bill Moyers show last Friday. Really interesting discussion on both the bailout, and the meaning of having “real” public discourse and debate. On the bailout, the guests talked about how all the safeguards we had placed on Wall Street were voted off in favor of having the SEC be the watchdog. The SEC left it up to the financial institutions themselves, and, well, guess what happened.

There was a lot of other discussion about how many tried to blame it on lending to the poor (to help turn public opinion), some of the history of that. If anyone’s interested, here’s a link to the new show:

In my eyes, in a historic reversal of public opinion based on fear, we’ve just handed over billions of dollars of taxpayer money to the same people who got us into this mess. And we don’t really know what the banks are going to do with all that extra insurance money.

I don’t feel fearful. I’m just noticing that it’s politics as usual. And I think we are in for a long few years of cleanup.

QM, I will have to watch the Bill Moyers’ discussion. I actually wanted to come back here because yesterday I saw an article about that mental health funding that got attached to the $700B bailout. It turns out the mental health funding was 12 years in the making, and it was sponsored by Sen. Pete Domenici (R-NM) and Senator Wellstone (now deceased) from MN. The two of them co-sponsored the bill many years ago. Domenici had a mentally ill (schizophrenia) daughter, which prompted his work in this area.

Domenici has a degenerative type of brain disease and is retiring, but having been influential (he was Chair of the Senate Budget Committee for many years) I guess he used the mental health piece as his leverage in agreeing to influence fellow senators to sign on the overall bailout.

I thought it was pretty interesting that I saw that article in the newspaper after you had raised a question about that particular slice of the overall add-ons. Also thought it was interesting the NM-MN connection.

[…] bumped into a coworker in the file room this morning. She said she finally looked at her 401K; she lost $7000. The Presidential candidates debated in a town hall forum tonight. Millions of people tuned in. […]

ybonesy, I meant to come back to your last comment (#33). Thanks for leaving that history of the mental health parity bill. I knew about the Wellstone piece but not about Sen. Pete Domenici or that there was a New Mexico connection. I’m a strong supporter of mental health parity, too, having suffered from depression over different periods in my life. And I’m happy it has finally passed.

The sad part for me is that it had to get connected to this bailout to even see the light of day again. I feel like the bailout needed to be judged on its own merits, and that people needed to be held accountable for all that debt, but that’s just me. And by now, it’s a point that doesn’t matter! The world has moved on. The American financial crisis has now filtered out to become a global economic crisis.

You know, one good thing about all this financial mess is that I’m gaining a better understanding of the global economy. There are so many PBS and NPR shows where the experts are breaking it all down into simple terms that I can understand. It’s totally out of my area of expertise, so I’m grateful to have a little more knowledge. And even though I’m powerless to do anything about most of it, I can focus on my little corner of the financial world and make the best choices I can.

Now that 8 or 9 of the major banks in this country have been infused with government money, (I read that the heads of those banks all agreed, none refused, and many felt they did not have a choice), I’ve been hearing the term Democratic Socialism bounced around. I recently saw Senator Bernie Sanders from Vermont (an Independent but self-described Democratic Socialist) speak on the subject.

He said that anyone who believes and supports the idea that every American should be provided with healthcare, in some way, supports the idea of Democratic Socialism. And it’s distinguished from Communism in that Democratic Socialism refers to all forms of socialism that follow an electoral, reformist or evolutionary path to socialism, rather than a revolutionary one.

In other words, if the government steps in to help make sure everyone in the U.S. has healthcare, that’s a form of Democratic Socialism. It’s also what’s going on with the bailout and the government infused banks. I find all this fascinating to follow in terms of living in a democratic society. Haven’t landed yet. Just thinking out loud as this money crisis continues.

BTW, lots of jobs starting to be lost in greater Minnesota. People are really tightening the belts here.

I look at universal healthcare the way I look at roads, public education, and other infrastructure—there are basic needs that everyone has, and our taxes go toward providing those basic needs. Healthcare *could* be one of those basic needs. It is not right now–except insofar as Medicaid and Medicare are concerned—but we could add a more comprehensive approach to the overall bundle. Transportation infrastructure, social security, public education, healthcare.

Is that socialism? If so, then I suppose in America capitalism and socialism have been existing side-by-side for as long as we’ve had a tax system. Balance. Not strictly one nor strictly the other.

The way the financial rescue plan is supposed to work in theory is, the $700B (not including the add-ons) is an investment that eventually will be paid back, with interest. Will it be successful? How long will it take? It’s not the first time we’ve had to do this in our country; other countries have also had to do similar things.

Revolutionary take-overs—government take-over of the banking sector and many other private industries like we saw in Nicaragua and many other countries in the 60s-70s (esp Latin America)—don’t have the slightest resemblence to what the US government had to do with these banks.

I get Senator Sanders’ differentiation, although I think it’s dangerous to talk about Socialism without a good understanding of what primarily Socialist economies look like versus what primarily Capitalist economies look like. For a primarily Capitalist country such as ours, the word “socialism” raises fears that we are on the path to something we’re not.

I really love this whole theme, btw. I have an MBA in international business with a concentration in Economics and an MA in Latin American Studies with a concentration in Political, and so I love as I go around the world understanding the dynamics of the economic system and the political system. China is a good case in point—a Communist government with a growing Capitalist economy.

ybonesy, a lot of good info in your last comment (#38). You make a couple of good points — that’s it’s dangerous to talk about Democratic Socialism in sound bites without people who are listening understanding the whole picture.

And IF (not saying I believe that) Socialism and Democracy have been living side by side in this country, it’s important to understand the degree to which that is happening.

And your comment:

I look at universal healthcare the way I look at roads, public education, and other infrastructure—there are basic needs that everyone has, and our taxes go toward providing those basic needs.

I tend to agree with you. Healthcare should be a basic need that is met along with education and infrastructure. And I’m a person who is willing to pay extra taxes to support my belief in that. An example — I don’t have children but vote time and time again to support giving more money to schools — because I believe that everyone deserves a good education, and that our teachers deserve to be supported.

But one of the problems is that not everyone believes that — or will vote to give more money toward education. There are so many times when schools (especially at the bottom of the economic rung) do not get the money they need from our society because people vote these things down.

Is there a danger of the same happening with healthcare?

BTW, I love these discussions, too, at the larger global level because I’m fascinated with the way things work as a whole. I don’t have the detailed understanding that you do. But at the more general level, I like the discussion it generates. We are starting to hear more and more of these type discussions during this fiscal crisis.

That depends on the method used to provide universal healthcare. Remembering during the Primaries, we heard the differences between mandated approach (Clinton’s) and optional (Obama’s)? Hillary’s was more comprehensive, more government involvement; Obama’s was a step toward covering those who didn’t have coverage.

I think, and this is just my educated opinion, that Obama’s plan balances keeping what is working under the employer-provided approach today and closing the gap for the uninsured by covering them with a plan similar to what our Congress members get. Under this approach, only the latter part of that would be at risk for not being fully funded.

Now, the selfish part of me likes the balanced approach (minus the possibility that the new part might not always be funded, depending on what the Congressional majority is) because it allows me to keep a healthcare plan that I love. I have a Lumenos/Blue Cross-Blue Shield plan that allows me to go to any doctor I want. I pay co-payments out of my Health Savings Account (HSA), but my overall deductible is one-half of what it was with a traditional PPO or HMO.

So I don’t want to change. Everything is perfect for my family, YET I want the uninsured to have healthcare. It’s also more efficient and less costly for all of us when everyone is insured—hospitals and doctors don’t have to charge more to help cover the cost of those who can’t pay—and especially via an approach that also takes care of preventative.

Yes, interesting about differences in healthcare approaches. It’s one of the most important issues to me because I’ve seen the way lack of coverage can devastate people. But I tend to support the more comprehensive mandated approach with more government involvement.

Like with education, I don’t trust that people are going to support giving their money to healthcare — the way people don’t really support giving money to schools or basic education unless they don’t have it in their own lives or if it doesn’t impact them directly.

The problem with keeping the employer-provided approach today is that employers are making less and less benefits available to employees and leaving more and more of the burden to pay on them. When I was working for a big healthcare company for 9 years, I saw our own personal healthcare benefits be nearly cut in half during that time period, leaving us to pay more and more.

It’s a good discussion. I’m glad people are talking about it in this country. Because it’s a real problem to many Americans. And all the decisions we make about it are connected to MONEY.

The idea of making choices for the good of the whole — to support giving money out of our own pockets to others because it’s the right thing to do — I wonder if it’s a dying concept. Or perhaps it’s only human nature to fluctuate between one and the other — balancing what’s working for us and what we can give to others.

Yeah, I’m glad, too, that we’re talking so much about socialized services, how you pay for them (largely taxation), and how we share the burden of supporting all. Clearly this is a fundamental philisophical difference between the two political parties.

Personally, even though I am a progressive Democrat, I would be careful about moving too far in the direction of the government providing so much that we do become a Socialist Democracy, similar to Denmark, for example. I like the balance of having both Capitalism and certain socialized services (and I do think healthcare is one of those services).

But, it’s a huge difference being where we are, with an income tax rate in the low- to mid-30% (depending on how much you earn) and Denmark’s income tax rate in the low 60%. And I’m not saying that in order to pay for mandated health care, you’d have to raise taxes close to where Denmark is, but I guess I’m pretty centrist when it comes to a balanced budget.

Right now we are trillions of dollars in debt (not including the cost of the Iraq War), so it’s hard for me to see how we could pay for a more comprehensive healthcare system at this point. For right now I think a balanced approach is the right one.

It’s a step in the right direction, and then let’s see what we can do in a few more years, once this deficit starts to get under control. That’s my thinking anyway.

ybonesy, did you ever think about going into politics in a more formal way, at a level higher than local? I think you would have made a great Senator, or even President. Seriously, I wondered if you ever thought about going that direction when you were younger, even a teenager. Your knowledge base and the way you think and act with people — you’re a natural. Was it something you ever considered? 8)

I was approached once by some local Democratic folks who said I should get a start in politics—run first for the School Board, then make my way up. I told them NO way. I’d HATE politics. It’s honestly not about good ideas and policies. It’s a high school popularity contest.

But, you know what? I honestly admire anyone who goes into politics. They have to have tough skins and be very dedicated to serving the country in order to put themselves through the process. Do you agree?

Another writer weighs in on this crazy financial situation. Margaret Atwood (author of “The Handmaid’s Tale” and, most recently, “Payback: Debt and the Shadow Side of Wealth”) had an Op-Ed piece in the NY Times this week.

She covers a lot of ground in a short essay: debt slavery, creditor’s responsibility, sense of fairness, religion and spirituality in relationship to debt, and working for the common good. What’s really behind all this debting?

But we’re deluding ourselves if we assume that we can recover from the crisis of 2008 so quickly and easily simply by watching the Dow creep upward. The wounds go deeper than that. To heal them, we must repair the broken moral balance that let this chaos loose.

Debt — who owes what to whom, or to what, and how that debt gets paid — is a subject much larger than money. It has to do with our basic sense of fairness, a sense that is embedded in all of our exchanges with our fellow human beings.

ybonesy, I get the feeling it’s just a taste of the depth she probably goes into in her book, Payback: Debt and the Shadow Side of Wealth. It made me want to read it. The piece resonated with me because I’ve learned to look at money as a form of spiritual energy — it’s people that make it strange.

Hey, I never answered your question in #44. Yes, I agree about the tough skins and dedication. It’s something I don’t have the stomach for. I like to think that people who go into politics start out there in order to serve the people, a kind of calling. What happens after that, I don’t know. Power does strange things to people.

I kind of miss the Walter Mondale, Paul Wellstone kind of politician. I think it’s sort of a thing of the past. There is so much glitz these days, everything has changed. Like you said, popularity contest.

Hey, that reminds me, I heard there’s a new film coming out on Walter Mondale’s life. He didn’t want to do it but changed his mind when his kids urged him to do so. Very humble man. Humility is something politics could use a little more of. I can’t remember the name of the film right now. When I see it, I’ll come back and comment.

1) Interesting essay on Alan Greenspan and novelist Ayn Rand (Atlas Shrugged) who was Alan Greenspan’s ideological guru. Greenspan met Rand in New York as a young man. There was also a discussion with James K. Galbraith in this segment. Bright man whose father taught him a lot of what he knows. (LINK TO VIDEO). From Moyers:

Rand was a hedonist, an exponent of radical self-interest, who so believed in unfettered, unbridled capitalism that she advocated the abolition of all state regulations except those dealing with crime.

2) My favorite segment on Mark Johnson, co-director of a documentary about the transformative power of music: PLAYING FOR CHANGE: PEACE THROUGH MUSIC (LINK). About midway through this segment, there is a FANTASTIC international version of Stand By Me. What an amazing and altruistic project. Brought tears to my eyes. (LINK TO VIDEO)

3) The last segment is Moyers essay on the real cost of the bailouts, Pauson’s millions, and the gap between rich and poor (LINK TO VIDEO).

The cost of all these bailouts to the taxpayer is more than two and half times what we forked over twenty years ago to pay for the Savings & Loan crisis – a whopping $8,750 per household. So while you may have seen your retirement savings or college tuition account destroyed or have been on of the 800,000 who have lost their jobs so far this year, the masters of the universe are doing just fine, thank you. Treasury Secretary Henry Paulson is looking out for them.

During his 32 years at Goldman Sachs, where he knew many of the players now floating to earth with taxpayer parachutes, Paulson accumulated $700 million. And now he says he’s afraid that if he clamps down too harshly on compensation for his old friends, they might not be enthusiastic about participating in his plan to save our economy. I am not making this up.

Or this: the 30-nation Organisation for Economic Co-operation and Development – or OECD – is out this week with a new report on global gaps between rich and poor. Guess which great industrial nation had the fourth highest inequality in incomes – behind Mexico, Turkey and Portugal? Right. Us.

Here’s precisely what the report says: “Rich households in America have been leaving both middle and poorer income groups behind. This has happened in many countries but nowhere has this trend been so stark as in the United States.” Now there’s some real spreading around of the wealth – in one direction: up.

[…] education, health services, and government, which boosted employment last month, have been spared. F. Scott Fitzgerald might say that a “vast carelessness” has caused this money mess. But maybe there is a silver lining. Is the glass half empty or half […]

Oh, dear. I’m in the middle of Hemingway’s “A Moveable Feast,” and I’ve just completed the chapter about Fitzgerald, or “Scott” as Ernest calls him. It’s post-The Great Gatsby, and pre-Zelda goes to the mental institution.

Though I don’t like to speak badly of a fellow Minnesotan, F. Scott is terribly behaved in Paris. As is his bride, Zelda. This is all from Hemingway’s perspective, of course, but if even if half of it is true, F. Scott needs a big, fat lesson in manners and maturity.

I heard on the news today that production is starting on a remake of “The Great Gatsby.” Carey Mulligan is staring as Daisy. That’s reason enough for me to put it on my “must see” list for November 2012.

Thanks for the update, Teri. Carey seems to like the literary fare. Pride & Prejudice was it? Hey, didn’t we see Gatsby at the Guthrie on one of our Summer outings with sweet Marylin? Tonight I’m watching the made for TV movie Lonesome Dove. Looking forward to the interviews. My favorite extra features are always the interviews.

Teri, one other thing about this piece on Money & Mess. Oddly, I was just thinking about it yesterday when I was reading Lost Twin Cities by Larry Millett. It’s about all the amazing architecture that’s been lost in St. Paul and Minneapolis, especially during the 1960’s. I think there is a documentary of the same name. Anyway, I was struck by these few paragraphs about the economy of the 1800s. They could be talking about 2011:

Everyone in St. Paul, it seems, had caught the speculative fever, and land prices soared on the wings of hope and greed. A sixty-foot lot on Third Street that had sold for two hundred dollars in 1847 was worth six thousand dollars by 1857, and there seemed no end to the upward spiral. “City lots jumped so high over night that the tallest ladder could not reach them in the morning,” wrote Thomas Newson, with perhaps a touch of hyperbole, in his 1886 history of St. Paul. “It was land for breakfast, land for dinner and land for supper!”

But when a New York insurance company failed in August, setting off panic in the financial markets, the bubble burst. Out of it spilled a cargo of economic woe that hit frontier cities especially hard.

Williams recalls:

‘Everything had been so inflated and unreal—values purely fictitious, all classes in debt, with but little real wealth, honest industry neglected, and everything speculative and feverish—that the blow fell with ruinous force. Business was paralyzed, real estate actually valueless and unsaleable at any price, and but little good money in circulation. Ruin stared all classes in the face…general gloom and despondency settled down on the community. In a few days, from the top wave of prosperity, it was plunged into the slough of despond.’

When I read accounts like that from history, it reminds me that ups and downs run across hundreds of years, across all time. Times seem tough for many right now. But things have always been that way. There have always been greedy people, dishonest people, people who would steal the shirt off your back. And generous, kind, and giving people. Sigh. Money & mess.

One last thing before signing off…I just reread some of the older comments on this piece. I had forgotten how political they were. I actually watched the Republican debates last night because I couldn’t pull my eyes away from them. They leave me…well, speechless. Then I listened to Obama’s jobs plan tonight and thought he hit it out of the park. These are such extremes. You have to wonder what’s going to happen in the 2012 elections. I was most blown away by Rick Perry’s 2007 executive order in trying to implement a mandatory HPV vaccination program for school-age girls. What?? One more reason I just have to turn off the news once and a while and step away. There are some days when I think I may lean more Independent.